Corruption—A Social & Moral Cancer (2)



With the worsening crisis of the US and global economy expected to further aggravate poverty in the country, independent think-tank IBON Foundation today said that it has become more crucial for government to ensure enough resources are spent for the poor.

IBON said that the Arroyo administration must start by increasing the allocation for social services in the 2009 national budget. The group criticized the allocation of 2.5% of the total budget for health; 13% for education; and 0.4% for housing as atrociously low especially in today’s environment of rapidly rising prices and greater economic uncertainty.

IBON said that the perennially low budget allocation for social services will have a deeper repercussion on the poor and vulnerable sectors as the deteriorating global economic crisis destroys more jobs and livelihood and inflates the cost of living.

Experts count slowdown in export demand, tighter flows in foreign investments and increased speculation in food and fuel prices as among the consequences of the US financial crisis and overall slump in the world economy.

With increased poverty, it becomes more urgent for government to provide sufficient social services such as health, education and housing. But the proposed budget levels obviously could not cover the expected increased demand for public schools and hospitals among others.

For the past ten years, government has been spending an amount equivalent to 2.1% of the gross domestic product (GDP) for education, way below the international standards of 5% to 6%. For health, it has been spending only 3.2% of the GDP, lower than the norm set by the World Health Organization (WHO).

IBON said that the government should at least meet these levels to alleviate the present condition in the country seen to worsen with the global crisis. To increase spending for social services, government should put a stop to burdensome payments and cut back on military spending. The proposed budget for 2008 allocates P683 billion for debt principal and interest payment, while it allocates P5 billion for AFP modernization. In contrast, government allots only P30 million for health care asssitance.

The group added the removal of regressive taxes such as the reformed value-added tax (RVAT) on oil is equally urgent to lessen the inflationary impact of the financial crisis.

The Arroyo government should also abandon its proposal for new taxes because these will further burden the Filipinos already suffering from low incomes and spiraling cost of living. IBON also urged the administration not to use the global crisis as an excuse to impose more taxes in its effort to achieve a balanced budget.

Civil Society, Donors, Gov’t Commit to Make Aid More Effective in Combating Poverty

Civil society groups met today with representatives of government and major donor agencies to discuss how to work together in ensuring that official development assistance (ODA) is effectively used to reduce poverty in the country.

In a multi-stakeholders’ consultation organized by AidWatch Philippines on July 18, major donor agencies the World Bank and Asian Development Bank (ADB), and government representatives agreed with civil society groups that the country’s aid system should undergo major changes to help combat poverty. The meeting identified issues related to the principles of the Paris Declaration, a set of reforms aimed at improving aid in reducing poverty and inequality in recipient countries.

World Bank country director Bert Hofman and ADB senior specialist Claudia Buentjen gave keynote speeches on development effectiveness in the Philippine context.

Government representatives included the National Economic Development Authority (NEDA), members of the Congressional Oversight Committee on ODA (Cocoda), Commission on Audit, Departments of Agrarian Reform and Social Welfare and Development, and local government units. NEDA Project Monitoring Staff director Roderick Planta shared the evaluation of the implementation of the Paris Declaration in the Philippines .

Over 60 civil society organizations from participated in the multi-stakeholders’ meeting. Representatives of the Canadian International Development Agency and UNICEF were also present.

The July 18 multi-stakeholders’ meeting is the culmination of a series of island-wide consultations on aid effectiveness organized by AidWatch. Such multi-stakeholder process involving broad civil society formation, government and donors is considered one of the most advanced practices in the aid process.

AidWatch Philippines is a national network of grassroots-based non-government groups working on ODA issues in the country. It has over 150 members in more than 50 provinces nationwide, including 10 national networks and regional formations.
AidWatch Philippines aims to deepen relationships and develop various levels of collaboration between NGOs on aid-related issues and concerns. It also looks forward to constructive engagement with official government and donor agencies on the basis of fundamental development principles.


The number of Filipinos who see themselves as poor increased in the first four months of the year, according to the results of the latest IBON nationwide survey.

The IBON April 2008 survey showed that 79.3% of 1,495 respondents thought of themselves as poor, an increase from 71.7% in January 2008.

The latest IBON survey was conducted across various sectors nationwide from April 7 to 16, 2008 using a multi-stage probability sampling scheme with a margin of error of plus or minus three percent.

Below is the tabulation of results of the respondents’ self-rated poverty

When you look at your situation today, do you think of yourself as poor?

January 2008 April 2008
Frequency Percentage Frequency Percentage
Yes 1,077 71.66 1,186 79.33
No 269 17.90 236 15.79
Don’t Know 141 9.38 68 4.55
No answer 16 1.06 5 0.33
Total 1,503 100.00 1,495 100.00

The full results of the IBON April 2008 Survey may be viewed at .

Why Fear Japan ’s Ire Over Non-Ratification Of JPEPA? Think-Tank Asks Miriam

Independent think-tank IBON Foundation asks Sen. Miriam Santiago why she is more concerned over earning the ire of Japan if the country fails to ratify the Japan-Philippines Economic Partnership Agreement (JPEPA) than the damaging consequences the pact is likely to bring the economy.

Santiago , who chairs the foreign relations committee, filed a committee report endorsing conditional concurrence which requires Japan to comply with at least 15 specified constitutional provisions to avoid a no-approval vote.

But according to IBON research head Sonny Africa, “Asking for a conditional concurrence from Japan is foolish because these questionable provisions in JPEPA are precisely the ones Japan wants included in order to gain maximum advantage for its corporations.”

These unconstitutional provisions include the “national treatment” clause that gives Japanese investors the same rights as local entrepreneurs; and the lifting of performance requirements that would have required Japanese investors to use a certain level of local content in their production and the hiring of a certain number of local workers.

Africa added that JPEPA’s proponents in the Senate themselves admit that the problem with the pact is that the advantages “were in favor of Japan but not necessarily the Philippines ”.

“The proposal of conditional concurrence highlights the unconstitutionality of JPEPA, and no amount of modification can make the deal beneficial for Filipinos,” he said.

“We should not be afraid of earning the ire of Japan but rather demonstrate that the Philippines is not afraid of rejecting bad trade deals that don’t promote its economic interests.” (end)

IBON is a convenor of No Deal! Movement Against Unequal Economic Agreements.


As government continues to turn to importation as remedy for the current rice crisis, this time with the proposal to further cut the powers of NFA and increase private importation, research group IBON reminds the administration that rice imports, based on experience, do not result in lower-priced rice.

Decades of importation has proven that imported rice are not sold at cheaper prices because private importers have the monopoly over pricing and trading, while government has withdrawn support for marketing and distribution. The NFA’s reduced role in palay procurement and rice trading, including setting price ceilings left farmers and consumers at the mercy of traders. Data shows that the monopoly of the rice market is increasing, with only 2,968 rice dealers and wholesalers as of 2006 compared to 21,000 in 1986. Meanwhile, NFA procurement is only at 0.5% and distribution rate is only 6% of total production.

Prices are even likely to be driven up by the recent decision to remove the 300,000 metric ton quota on private sector rice imports because it paves the way for profiteering. The government says that the NFA will remain the “importer on record” so private sector importers will not have to pay the current 50% tariff and will instead just be charged a P2-3 “importation service fee” which, the agriculture secretary was quoted as saying, “(reduces) the tariff to about around maybe 10%”. The NFA will also supposedly determine import volumes.

Under this scheme, rice bought abroad at US$700 per ton could be sold at as much as P35.40 per kilo or higher – broken down into P29.40 import cost (at an exchange rate of P42 per US$1), P3 NFA import fee, P3 storage and distribution cost. This amount does not yet include traders’ mark-up. If rice is bought abroad at US$1,000 then its domesti c p rice could rise to as much as P48 per kilo or higher with traders’ mark up.

The worst hit are the poorest four-fifths of Filipinos trying to live off P110 or much less each day and for whom food takes up half to over two-thirds of their expenses. As it is they have already seen their real incomes fall by 5%-13% in the period 2000-2006. Majority of these number are the rice farmers who are pushed more into bankruptcy with the flooding of imported rice in the market amid sufficient local production of palay.

If we are to ever going to get out of this crisis, the government should in the short term, start expanding land area planted to rice, increase the NFA’s local rice procurement to 25% to 30% so it can effectively influence rice prices in the market, provide sufficient production and price subsidies to farmers, and rescind its commitments to further liberalize agriculture


As the Senate resumes its sessions today, independent think-tank IBON Foundation again urged senators to reject the Japan-Philippines Economic Partnership Agreement (JPEPA) saying that the P365 billion in investments that the deal will supposedly bring is too high a price to pay for the death of the local manufacturing sector.

As it is, the long-term liberalization of the economy has further weakened the country’s manufacturing base. But the implementation of the JPEPA, and the free trade pacts that will inevitably follow in its wake, would end any chance of improving the local manufacturing sector and will permanently reduce it to being a mere assembler of imported inputs for re-export.

This trend is already evident in recent export figures from the National Statistics Office, which showed that industries which use imported raw materials or assembled parts, have overtaken those sourcing chiefly domestic raw materials.

IBON research head Sonny Africa said the trade liberalization brought by the JPEPA would further worsen the already dire situation of the country’s manufacturing sector. The “national treatment” and “most-favored-nation (MFN)” provisions in the free trade pact would prevent the country from imposing policies to help local manufacturers, such as restrictions on imported products and local content requirements.

Africa pointed out that the JPEPA is merely a way for Japan to promote the interests of its transnational corporations along with their local elite partners. Japanese companies already dominate many of the sectors in the local electronics manufacturing export industry, with its three biggest electronic firms accounting for over 53% of total gross revenues in the computer manufacturing sector as of 2006.

Instead of passing exploitative free trade pacts like the JPEPA, Africa said the government should instead implement national industrialization policies, which would lead to the creation of millions of much-needed permanent jobs and the country’s long-term economic development.